The Federal Reserve's recent decision to cut interest rates by 0.5% "is a campaign contribution to [former President] Donald Trump," economist Peter Morici of the University of Maryland's Robert H. Smith School of Business told Newsmax on Tuesday.
Morici told "Wake Up America" that the Federal Reserve's board members are "debating how far they can take rates and how quickly" after the Fed announced its first rate reduction since March 2020 last week.
He noted that "the liberals on the Fed board … are cautioning us that the bottom is going to fall out of the jobs market," adding, "If that's the case, I think you ought to go hug Donald Trump and endorse him."
Morici said "A half-point cut when we begin an easing cycle is usually reserved for an imminent calamity," adding that it "really kind of fed into the desires of the liberal media."
He added, "My feeling is that this is a campaign contribution to Donald Trump" by Federal Reserve Chair Jerome Powell, who was elevated to the position by Trump in 2018 and renominated by President Joe Biden at the end of 2021.
Morici noted that "we have a history of Powell being political in the past. For example, when Biden was delaying his reappointment … that's when the transitory myth was hatched that inflation is merely transitory and it's going to go away."
According to Morici, Powell "only got religion on inflation after he was reappointed and it really was too late."
He added that he "didn't think" the Federal Reserve "would go that far" in reducing interest rates.
"We just don't do a half a point unless there's a calamity outside and I don't see one."
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Theodore Bunker ✉
Theodore Bunker, a Newsmax writer, has more than a decade covering news, media, and politics.
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